What Is The Impact Of China'S Textile Industry On European Textile Production And Marketing Or 50%+?

Affected by the global new coronavirus, the European textile and garment manufacturing industry expects sales and production to drop by more than 50% this year, most of which have laid off workers and face financial difficulties.

EU textile and garment industry production and sales dropped by more than 50%

According to the statistics from the European Union statistics bureau, although the sales and exports of textile and garment industry performed well in 2019, the European textile and garment industry passed the difficult 2019 because of the EU's economic recession and Britain's departure from Europe.

The European clothing and Textile Industry Association (Euratex) said that the data of textiles and clothing industry were in line with the overall situation. The number of employed persons has dropped by more than 2%, and the turnover has been negative for the first time in 2012-2013 years. Compared with 2018, the textile industry dropped by 2% and clothing decreased by 1.3%.

However, a questionnaire survey conducted for Euratex members shows that the confidence index of textiles and clothing industry has dropped sharply in March 2020 because of the new coronavirus, and the impact will only get worse.

According to the preliminary survey results, more than half of the companies expect sales and output to drop by more than 50%. In addition, 90% companies are facing serious financial constraints. 80% companies will be temporarily laid off, while 25% companies are considering closing their businesses.

Euratex said that there is still a negative attitude towards the crisis caused by the new coronavirus and the pressure on the operation of the domestic market. EU countries' border control is very severe, resulting in delays in supply and cancellation of orders, thus exacerbating the economic impact.

The report shows that many textile and garment companies need immediate rescue measures to absorb and solve the crisis under the strong global pressure brought by the epidemic.

Euratex has asked the European Commission to presuppose a financial rescue plan to ensure that the EU member states adopt a consistent approach and avoid restricting the free movement of goods and labour.

DirkVantyghem, the EU's director general, said that the EU and its member states must make every effort to save our industry. At the same time, this crisis provides us with the opportunity to develop new blueprint. The European Commission will propose new industrial strategies that will enable us to rethink the existing business models.

What is the impact on China's textile and garment industry?

According to the data of the General Administration of customs, the total import and export trade between China and the EU reached US $75 billion 190 million in the 1 quarter of this year, down 19.8% from the same period last year, a decrease of 5.1 percentage points lower than that of China's foreign trade in the same period. Among them, China exported $49 billion 860 million to the EU, down by 22.1%, and China's imports from the EU dropped by 25 billion 330 million, down 15.1%.

In the overall EU data, exports of clothing and accessories were reduced by 8.8%, while textile yarns, fabrics and articles were reduced by 5 billion 470 million US dollars, down 14.8%. In the first quarter, although China was also affected by the epidemic, it had basically resumed work in March, and overseas orders returned to normal delivery. So compared to the overall data, the textile and garment industry has been doing well. However, despite the spread of foreign epidemic in the late period, the rejection of customs, cancellation of orders and delay in payment affect the decline of export data.

From the whole year, customs data show that in 2019, the EU imported 122 billion 16 million euros of textiles and clothing from the European Union, an increase of 3.91% over the same period last year. Among them, the European Union imported 39 billion 744 million euros of textiles and clothing from China, an increase of 2% over the previous year, accounting for 32.6% of the EU market share and a 0.6 percentage point decline in import share than in 2018.

That is to say, China's textile and clothing account for more than 32% of the total imports of the European Union. If the European Union's annual production and sales dropped by more than 50%, the corresponding impact on domestic textile and clothing exports will be greater. Judging from the data of the first quarter, it will affect more than 10% of textile and garment exports this year. Recently, a large number of textile orders have been cancelled or postponed. This is also confirmed. If the spread of foreign epidemics is not effectively controlled this year, orders will fall and exports will decline sharply, or will really become a reality. Textile and garment enterprises and foreign trade enterprises should also make early plans to make annual business plans ahead of schedule so as to avoid greater economic losses.